Pfizer in talks to acquire Wyeth for $60 billion

In among the top M&A deals ever, Pfizer Inc is reported negotiating to acquire rival drug maker Wyeth in a blockbuster deal potentially worth more than $60 billion that could alter the global drug industry, The Wall Street Journal reported today.

Jeffrey B. Kindler, Chief Executive Officer, Chairman, Pfizer IncThe last pharmaceutical deal worth more than that was when Pfizer bought Pharmacia Corp. for $60.3 billion in April 2003. Merck & Co., GlaxoSmithKline Plc and Abbott Laboratories also have said they're interested in deals as prescription sales wither from generic competition.

At more than $60 billion, Wyeth's price tag would dwarf Eli Lilly & Co.'s largest buyout last year of biotech cancer drug maker ImClone Systems. Like Pfizer, Lilly is looking at a major patent expiration in the coming years, as its antipsychotic drug Zyprexa will be vulnerable to generic competition in 2013. (See: Eli Lilly to acquire ImClone for $6.5 billion)

News of the possible deal sent Wyeth shares up 13 per cent in pre-market trading Friday, while shares of Pfizer slipped about 2.7 per cent.

Pfizer would likely use a combination of cash and stock for the acquisition, according to the report. While Pfizer shares have fallen nearly 5 per cent in the past three month, those of Wyeth have risen over 15 per cent. With its shares closing at $38.83 yesterday, Wyeth has a market capitalisation of roughly $51.7 billion.

A combination of these two US pharmaceutical giants would redraw the boundaries of the global drug industry, which has suffered from flagging product development and high fixed costs in recent years.